Fraud Charter – Time is short for LiP portal

When the Civil Liability Bill comes into law in April next year, the new structures set up to provide claimants with a new route to justice may not be ready.

That was the message from the latest meeting of the Fraud Charter in March.

The gathering of fraud specialists from the worlds of insurance, the law and government heard that, while work is continuing setting up a new web portal for claimants to register their claims, the system may not be complete in time.

The new law will raise from £1,000 to £5,000 the threshold for claims in the small claims court. This crucially means that anyone making a soft tissue injury valued at under £5,000 won’t be able to claim legal costs.

That means they will become litigants in person (LiPs).

“The overarching plan is to have a gateway that will give litigants in person access to the Claims Portal and to MedCo and to various other resources,” says Sue Brown, director of the MedCo system which regulates medical assessments in claims, and also a director of the Claims Portal.

“In an ideal world you want to give them access to all the resources they will need in order to make a claim,” she says.

“The challenge in drawing up the process is that it has to be sensible. Insurers have to have the information they need to assess the claims at the outset. It also has to be relatively quick.

“The objective is that as many claims as possible should be settled within this process, because we don’t want to be flooding the courts with low value PI claims that currently don’t go anywhere near them.”

But time is short, she says.

“We would have wanted to see the bill two months ago in order to be ready for next April, but we’re working in a number of groups with the Ministry of Justice team.

“We’ve got a number of different workflows in stream including writing the new protocol and the development of the platform. There’s a group looking at how we’re going to interact with LiPs and how they’re going to be supported.”

Timing is crucial 

Brown says she’s concerned about the timetable, but a launch of some kind by April is doable, “if we have answers to questions fairly soon, seeing what the protocols are going to look like at a fairly granular level”.

Also, she asked, “Are we going to be dealing with liability? There are some ideas at the moment, but nothing’s really solidified.

“We’ve come up with an overall plan, but that is predicated on decisions being made now, really.

“Depending on how much time we have to build it will dictate how much we can actually do through this platform,” she says.

“Next April is achievable depending on a lot of things falling into place.”

Mark Allen, manager of fraud and financial crime at the ABI agrees that timing is crucial.

“It’s predicated on the basis that the IT build will start over the summer at the latest, which is ambitious,” he says. 

“I think there are reputational risks here because this is consumer-facing. Because it’s consumer-facing there’s going to be a lot more consumer data on there.

“The build is more complex than MedCo and the Claims Portal itself, and history shows us that both of those projects had delays as well.”

The purpose of raising the small claims limit was to remove the cost of legal representation from the bulk of low-cost personal injury claims. That will reduce the overall bill to insurance companies and thus open the way for reductions in motor premiums.

But experience with even the relatively simple process of registering claims for PPI compensation has shown that individual claimants are wary of representing themselves and are liable to fall into the clutches of claims management companies.

“I think what will happen is that people will go looking for someone to help them do it. I think that’s everybody’s real worry,” says Brown.

And she added that because of the volume of data that will be needed, the process of registering with the new portal is likely to further deter claimants from representing themselves.

“The first challenge for claimants will be to find the portal. We won’t have the resources to advertise it. And that leaves the door open for CMCs,” she says.

Because the new LiP portal is open to individuals, there’s no way of stopping CMCs coming on to it.

Carpenters director Donna Scully agrees that the new system could have the unintended consequence of opening the door to CMCs, who are currently barred from the Claims Portal.

“You set up tariffs for personal injury, and that reduces costs; but then you’ve got credit car, repair and rehab, which is still very lucrative, and all you have to do is add a bit on to each of those to make up for the 25% of the PI that you’re losing,” she says.

“It’s still lucrative work for the CMCs.”